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AP4 returns 10% in 2016

AP4, Stockholm, reported a 10% return for the year ended Dec. 31, with assets increasing 7.7% to 333.9 billion Swedish kronor ($36.7 billion), said a news release Wednesday.

The return improves on a 6.8% gain in 2015. AP4 had a 10-year annualized return of 6.7% as of Dec. 31.

A spokeswoman said that the key drivers of the improved 2016 return were Swedish equities and real estate, which returned 12.4% and 25.9%, respectively.

“Our investments in low-carbon strategies that reduce climate risk in assets now amounts to 24% of the global equity portfolio. The goal is to continue to increase these investments in volume and even expand with new sustainable investments that can decrease the risk in the assets with equal or better returns,” CEO Niklas Ekvall said in the release.

As of Dec. 31, AP4 had a 39% allocation to global equities, 32% fixed income, 19% Swedish equities, 7% real estate and 3% alternative assets.

AP4 is one of five buffer funds in the Swedish pension system. It paid out 6.6 billion kronor of fund capital to cover the deficit between payments and receipts in the pension system in 2016. It paid out 4.9 billion kronor in 2015.